Compare These Top Vendors for Online Stock Trading

For web-savvy "self-directed" investors, online stock trading is de rigueur. Online stock trading has redefined cheap; not to mention quick and easy. So cheap, in fact, that some major banks now offer free online stock trades.  Fees elsewhere range from $2 to $25 per trade.

Discount online brokers that gained popularity with cheap no-frills service are now adding gizmos galore. You can test trading strategies without actually buying (TD Ameritrade); view investment videos (Schwab) or tap research (multiple brokers). All the online stock trading ingredients you need are readily available -- just add money.

Low fees, however, aren't the best way to pick an online broker. Trading tools, execution speed and research are crucial. To get what you need from online stock trading, consider these issues:

     1) Will you place just a few buy/sell "trades" per month or year; a few dozen; or hundreds? At lower volumes, you might benefit from paying a bit more to get service and research recommendations.
     2) It's ill advised to starting trading stocks online without first educating yourself on stock investing basics. You can buy or sell quickly with just a few mouse clicks -- and your money can evaporate just as fast. 
     3) Know your time horizon. Buy-and-hold investors are in it for the long term; 2-5 years or more. Mid-horizon investors may only hold stocks for 6-12 months; and "day traders" move in and out of market positions in a single day. The latter is strictly a game for pros who know what they're doing (and they lose money too).
    4) Recognize the down-side of online trading. If your web connection tanks, you're stuck. You could have problems accessing your account or making trades, especially during high-volume periods. Plus, you're on your own and may have no lifeline to professional advice for when or how to exit the market. And while full-bore brokers can sometimes offer access to IPOs or other opportunities, online discounters can't.

Compare online stock trading and brokerage providers

Online stock trading is so competitive there's a perpetual price war to attract your business. But these days, with prices at rock bottom, the real battle is over additional services the discounters can offer.

Pick an online brokerage account partner

Check prices, features and available research at several different online stock trading firms.

Arm yourself with information

The more knowledge you acquire about online stock trading, the better your chances of success.

See our other stock investing How-To Guides

How-To Guides on Work.com and Business.com can help you locate all the tools and resources you need to be successful at investing in stocks.